4CBF6A4BD596DAF1872587A000793335 Hearing Summary

Brian Moore, Executive Council of CBA Labor & Employment Section, testified that the section is still looking at act and processing input from members to determine if it will be able to reach a consensus to provide section input or recommendations on the act. He invited the commission to let the CBA know if there are any specific issues regarding the act the section should look at. Testifying only for himself as a practitioner in this area of law, Mr. Moore went on to say that this is an area of law that would benefit from action by the general assembly. There is a lot of uncertainty regarding the enforceability of non-compete agreements leading to litigation. Colorado law in this area is unique and can be hard to explain. Some ways that the uniform act would change current law and potentially be beneficial include setting specific timelines, requiring advance notice of a restrictive agreement (before an employee accepts an job offer), and establishing an income test that makes restrictions void for incomes less than the state mean income. Colorado law enforces non-compete restrictions different depending if the employee is management or non-management and does not recognize customer relations as a valid reason to support a non-compete agreement. The uniform act would change this. Colorado law subjects any restrictive agreement, such as an agreement to not solicit, to the full non-compete analysis. The uniform act would fundamentally change that by making it easier for employers to have an enforceable restrictive covenant that stops short of being a full non-compete. Colorado law has separate provisions regarding physician agreements, which would need to be addressed in the commission bill. Mr. Moore stated that more input would be forthcoming in January. The commission asked whether current law was statutory or case law and if the uniform act was balanced in the protections of employees and employers. Mr. Moore replied that much of the uncertainly in the area is that current law is predominantly based on case law and that the act contains elements that affect both parties. .

Commissioner Tipper moved the Uniform Restrictive Agreements Act move forward with as a part of the commission's 2022 legislative agenda. Commissioner McGihon seconded and the motion passed 8 to 1. The bill will start in the House with Commissioner Tipper as sponsor.